Over the last twenty years, countries around the world have signed a large number of preferential trade agreements. These agreements differ strongly in their design, namely their depth, scope and flexibility. What explains this variation in the design of trade agreements? We contend that the design of trade agreements depends on the lobbying activities carried out by societal interests. The relative strength of the demands that are voiced, in turn, is a function of the degree to which bilateral trade relations are shaped by intra-industry and intra-firm trade. Moreover, we argue that the various design aspects are interdependent, in particular that deep and broad agreements require more flexibility. We test our arguments using an original database on the design of 357 trade agreements signed between 1990 and 2009. The paper contributes to the literatures on the rational design of international institutions, international cooperation and the political economy of international trade.
